Thursday, December 26, 2013

One of the thousands of reasons why I prefer crony capitalism over crony socialism

There is a logical fallacy that is often used in debates over the desirability of different social systems--the Nirvana fallacy. It has nothing to do with the 1990s band from Seattle (or Aberdeen, to be more accurate), and everything to do with inappropriate comparisons. The Nirvana fallacy is when one compares an idealized version of social system X with the existing version of social system Y to argue that X is better than Y. For example, comparing an idealized version of socialism with the existing version of capitalism would be an example of the Nirvana fallacy. Similarly, comparing an idealized version of capitalism with the version of socialism that existed in the former Eastern Bloc would be an example of the Nirvana fallacy.

I will avoid the Nirvana fallacy by comparing one particular aspect of life in two actual social systems, which I call crony socialism and crony capitalism. Crony socialism is what existed in my homeland, the former Yugoslavia, up until the early 2000s, and crony capitalism is what exists in most of the western world today.

The particular aspect of life I will be comparing is buying shoes for a teenager.

Buying shoes for a teenager in crony socialism

In the 1990s, I was a teenager living in what is now Serbia, and what was then the FR Yugoslavia. As clothes are an important aspect the life of a teenager, I, like most of my friends, was making a statement by wearing particular items of clothing. One of the statements most of us wanted to make is that we were not poor. So, we would strive to buy items of clothing that had a price tag in the range of $50 to $200. This may not look like much in the western world, but keep in mind that the average monthly wage at the time in Yugoslavia was about $150.

The strategy I would take to persuade my parents to let me buy shoes that cost about $150 was to lie. I would tell them that the price is about $70, while I would make up the rest. How did I make up the rest? Well, by saving, but not by the kind of saving you might have  in mind.

Every day, I would get an equivalent of $1 to buy lunch at school. I rationed this money in the following way. The first day, I would by lunch. The second day I would buy cigarettes (yes, I smoked as a teenager); and the third day, I would keep the $1 and save it. If you repeat this for about 200 days, you get nearly $70 in "savings". Then, if you add these $70 with the $70 or so you get from your parents, you have enough for the pair of shoes you wanted.

Buying shoes for a teenager in crony capitalism

In crony capitalism, or the system that exists in the western world today, buying shoes is much simpler--If you are a teenager, you go to your parents, they give you about $100 for a pair of shoes, and you buy the damn shoes.

Reflecting back, I prefer this arrangement over the one I described above. I would prefer it if I was a teenager and I surely prefer it as a parent.


  1. sa svime se slažem pa bih na osnovu ovoga mogao da konstatujem da se u Srbiji desila kombinacija opasnosti koje se naslućuju u tačkama 3 i 5. rad na crno prouzrokovan je skupim propisima(5) ,ali u većini firmi,marginalni vrednosni produkt radnika(3),bio veći ili manji,ne utiče na visinu plate.


  3. Možda je vama bolje, ali ta dilema se ne postavlja ovdje.